TriniTuner.com | Latest Event:
Moderator: 3ne2nr Mods
SEC looking at TCL complaint
Friday, February 13 2015
SECURITIES and Exchange Commission (SEC) chairman, Professor Patrick Watson, yesterday said the Commission is looking into a formal complaint made by former Trinidad Cement Limited (TCL) CEO Dr Rollin Bertrand into the conduct of the company’s chairman and board at a special shareholders meeting on Monday at the Hilton Trinidad.
Watson confirmed to Newsday that the Commission is in receipt of the complaint sent to him by Bertrand on this matter. However Watson said the Commission has not made any determination about the matters which Bertrand has raised or taken any decision as to what action it would take.
“We have to look at it,” Watson said. He added that once the SEC examines the matters raised by Bertrand in his complaint, the Commission will correspond with him accordingly.
In his letter to Watson, dated February 11, Bertrand based his complaint on three grounds. The first was his claim of a “lack of information and shareholders being muzzled.” Bertrand, who attended Monday’s meeting, indicated that while he was in a unique position to be able to criticially assess TCL’s future plans, other shareholders were not.
He claimed that shareholders were only given two to three minutes to speak on the issues before a vote was taken on a resolution to remove the 20 percent limit on shareholding. Betrand’s second concern was about shareholder approval being required for the board’s actions. On this issue, Betrand claimed the TCL board was “clearly giving preferential treatment to its largest shareholder, Mexican company Cemex.
Thirdly, Betrand complained that the current TCL board has too many directors “who are closely connected with Cemex.” Noting that Cemex has been selected to underwrite the proposed Rights Issue but it is unclear if this selection was the result of any type of competitive process, Bertrand said, “It seems that the consideration for this is that Cemex be granted the right to own a minimum of 35 percent of the company, yet one has to question the Board’s power to enter into such an agreement without shareholder approval.”
Asking whether these were “arms length transactions” and did Cemex directors on the board recuse themselves when these decisions were being taken, Bertrand charged that the current TCL board is treating its shareholders like “a rubber stamp.”
Saying that the TCL Board has announced that it is trying to get the regulators to waive Cemex’s obligation to get the regulators to waive Cemex’s obligation to make a mandatory offer to remaining TCL shareholders on passing the trigger of 30 percent shareholding in the company, Bertrand said, “Yet when shareholders are called to a meeting, the Chairman seems to want to take out his personal animosity against former directors and deny their right to speak.”
Bertrand further observed that apart from governance issues, Cemex is “an organisation in dire financial troubles.” He said Cemex has recorded losses of US$5.3 billion in the last five years (2010 to 2014) and has not paid a dividend since 2008.
Alleging that Cemex has had a worse financial performance than the previous “and much maligned” board of TCL, Bertrand said the current TCL board seems to have “thrown governance to the wind and is playing out its agenda to hand TCL over to a company that itself could collapse financially in the near future.